United Malacca Berhad

$UMCCA / 2593 (UNITED MALACCA BERHAD)
Research Report by TA

$UMCCA / 2593 (UNITED MALACCA BERHAD)
Research by Kenanga
OUTPERFORM – TP RM6.00

" Good 1Q Earnings”

UMCCA’s 1QFY25 results came in within expectations. Core net profit rose as its strong Malaysian harvest recovery, firm CPO prices and easier cost offset unusually poor Indonesian yields. FY25 earnings outlook still appears positive as we expect CPO prices to hold with cost remaining easy and the group’s Indonesian yields to eventually recover. We maintain our FY25-26F core net profit, TP of RM6.00 and OUTPERFORM call.

Analyst:
Khoo Teng Chuan
khootc@kenanga.com.my

$UMCCA / 2593 (UNITED MALACCA BERHAD)
Research by TA
HOLD – TP RM5.59

" Higher Contributions from Malaysian Operations”

 United Malacca Berhad’s (UMCCA) 1QFY25 results were in line with
expectations. Excluding exceptional items, core net profit surged 3.8x to
RM19.4mn compared to the previous year

Analyst:
Angeline Chin
angelinechin@ta.com.my

PLANTATION
$TSH / 9059 (TSH RESOURCES BERHAD) $UMCCA / 2593 (UNITED MALACCA BERHAD) $PPB / 4065 (PPB GROUP BERHAD)
Research by Kenanga
Neutral

“Inventory Pick-up On Weak Exports”

MPOB-reported palm oil production of 1.615m MT (-5% MoM, +12% YoY) for June 2024 was a tad above the 10-year average level, and within market estimate but 6% poorer than Kenanga’s estimate. However, poorer exports of 1.205m MT came in slightly (3%) below market and 13% lower than our expectation which led to higher QoQ and YoY closing inventory.

Analyst(s):
Teh Kian Yeong
tehky@kenanga.com.my

Changes in Director's Interest (Section 219 of CA 2016) - MR TEE CHENG HUA

DEALINGS IN LISTED SECURITIES (CHAPTER 14 OF LISTING REQUIREMENTS) : Dealings Outside Closed Period

$UMCCA / 2593 (UNITED MALACCA BERHAD)
Research by TA
Hold – TP RM5.43

“Indonesia Operation Shines"

The target price for UMCCA is adjusted higher to RM5.43 (previously RM5.38), based on CY25 PER of 16x. Maintain HOLD.

Analyst:
Angeline Chin
angelinechin@ta.com.my

$UMCCA / 2593 (UNITED MALACCA BERHAD)
Research by Kenanga
Outperform – TP RM6.00

“Indonesian Estates Drive Growth"

UMCCA’s FY24 results beat expectations on a bumper 4QFY24. Its FY24 core net profit eased 3% YoY as higher production was offset by lower CPO prices. Its FY25 earnings outlook is positive underpinned by firm CPO prices, easier cost and growing Indonesian FFB harvest. We raise our FY25F core net profit forecasts by 3% and maintain our TP of RM6.00 and OUTPERFORM call.

Analyst:
Teh Kian Yeong
tehky@kenanga.com.my

UMCCA - Notice of Book Closure

Quarterly rpt on consolidated results for the financial period ended 30/04/2024

Second Interim Dividend

MONTHLY PRODUCTION FIGURES (MINING / PLANTATION / TIMBER)

PLANTATION
$PPB / 4065 (PPB GROUP BERHAD) $TSH / 9059 (TSH RESOURCES BERHAD) $UMCCA / 2593 (UNITED MALACCA BERHAD)
Research by Kenanga
Neutral

“1QCY24 Results Review: A Patience Game”

1QCY24 plantation sector earnings were muted. Downstream continued to disappoint which dampened earnings of all three big integrated players, SDG (formerly SIMEPLT), IOI, and KLK. Upstream earnings held better on easier costs and firm CPO prices: thus, smaller, more upstreamcentric players fared better. Meanwhile, SDG’s solar farming plans highlight a lucrative alternative land use for the sector but limited sector-wide impact is expected as many planters are likely to stay oil palm-centric. Maintain NEUTRAL. PBV of 1.1x is not demanding but there is no strong upside catalyst. Higher CPO would be such a catalyst but supply-demand scenario suggests firm rather than bullish CPO prices ahead. We continue to prefer players with the ability and/or flexibility to grow such as PPB (OP; TP: RM17.50), TSH (OP; TP: RM1.30), and UMCCA (OP; RM6.00).

Analyst(s):
Teh Kian Yeong
tehky@kenanga.com.my

DEALINGS IN LISTED SECURITIES (CHAPTER 14 OF LISTING REQUIREMENTS) : Dealings Outside Closed Period

Changes in Director's Interest (Section 219 of CA 2016) - MR TEE CHENG HUA

DEALINGS IN LISTED SECURITIES (CHAPTER 14 OF LISTING REQUIREMENTS) : Dealings Outside Closed Period

Changes in Director's Interest (Section 219 of CA 2016) - MR TEE CHENG HUA

DEALINGS IN LISTED SECURITIES (CHAPTER 14 OF LISTING REQUIREMENTS) : Dealings Outside Closed Period

Changes in Director's Interest (Section 219 of CA 2016) - MR TEE CHENG HUA

DEALINGS IN LISTED SECURITIES (CHAPTER 14 OF LISTING REQUIREMENTS) : Dealings Outside Closed Period

Changes in Director's Interest (Section 219 of CA 2016) - MR TEE CHENG HUA

MONTHLY PRODUCTION FIGURES (MINING / PLANTATION / TIMBER)

PLANTATION
$TSH / 9059 (TSH RESOURCES BERHAD) $UMCCA / 2593 (UNITED MALACCA BERHAD)
Research by Kenanga
Neutral

“Higher-Than-Expected April’s Inventory”

We maintain CPO price of RM3,800/MT for CY24-25 along with our NEUTRAL call. The sector’s 1.2x PBV is defensive but there is no compelling upside catalyst. The smaller, more upstream-centric players should see decent 1Q earnings but weak downstream margins are expected to dampen profitability of larger integrated players such as SIMEPLT, IOI and KLK. We prefer PPB (OP; TP: RM18.50) for its regional agro/consumer exposure, and upstream-centric players with growth potential such as TSH (OP; TP RM1.30) which is expanding its planted area by 20%-25%, and UMCCA (OP; TP: RM6.00) as its Indonesian operation and profitability matures.

Analyst(s):
Clement Chua
clement.chua@kenanga.com.my

Changes in Director's Interest (Section 219 of CA 2016) - MR TEE CHENG HUA

DEALINGS IN LISTED SECURITIES (CHAPTER 14 OF LISTING REQUIREMENTS) : Dealings Outside Closed Period

DEALINGS IN LISTED SECURITIES (CHAPTER 14 OF LISTING REQUIREMENTS) : Dealings Outside Closed Period

Changes in Director's Interest (Section 219 of CA 2016) - MR TEE CHENG HUA (Amended Announcement)

Changes in Director's Interest (Section 219 of CA 2016) - MR TEE CHENG HUA

DEALINGS IN LISTED SECURITIES (CHAPTER 14 OF LISTING REQUIREMENTS) : Dealings Outside Closed Period

Changes in Director's Interest (Section 219 of CA 2016) - MR TEE CHENG HUA